Thursday, February 25, 2016

Death Dossier. Finale Folder. Bucket Brief. Mortality Memo.

At the law offices of JEFFREY BURR, we help clients with their estate planning.  But having the plan, a Will or Trust, is only part of the process.  I found an interesting graphic on social media and I thought I would plagiarize the idea.  The graphic discussed preparation of a “death dossier” –  the files and documents that are helpful to gather in planning for your death.   I thought of a few other names for this as listed in the title.
Here’s a summary of the documents or categories of documents that are helpful to gather and keep with or nearby your estate planning paperwork:

·         Estate Plan.  Obviously I’m going to lead with this one, but have a copy of your Will or Trust package in a location where your Trustee and/or Executor will find them.  While you are living, tell or show your Trustee where to find your binder.  Our office typically maintains the original copies for our clients and we attempt to make contact with the Successor Trustee, Executor, and family members when we become aware of a client’s passing.

·         Healthcare Power of Attorney – Directive to Physicians (including HIPAA release).  These important documents are part of the estate plan and should be in your binder.  Healthcare powers of attorney executed after about 2006 typically include a HIPAA release.

·         Personal and Family Medical History.  This is not part of your estate plan, but could be very helpful for your Executor and descendants.  A list of physicians regularly seen could also be helpful.

·         Marriage License (if applicable).

·         Divorce Papers (if applicable).

·         Housing, land and cemetery deeds.

·         Escrow/mortgage papers.

·         Vehicle titles.

·         Stock Certificates, savings bonds.  If these are in old-fashioned certificate form, perhaps keep the originals in a home safe or bank safe deposit box, but copies in the file with a note disclosing the actual location could be very helpful.

·         Safe Deposit Box.  Prepare a list of all safe deposit boxes and locations, along with instructions for locating the keys for access to the boxes.  From our experience, it can be very helpful to have a co-owner on each box so that someone will have access if you are deceased in order to avoid having to obtain a court order for box access.

·         Safe.  If you have a home safe or gun safe, inform a trusted person how to obtain access to the safe.  Sometimes the combination instructions will be hidden somewhere or will be entrusted to another person.  Leave a trail so that only the Trustee or Executor can access such safe at the appropriate time.

·         Brokerage and Stock Accounts.  If you have a trust, the trust should own these accounts.  Copies of statements for these accounts are helpful to identify the custody institution and advisor on the account.

·         Proof of Loans Made and Debts Owed.  Document money owed to you and acknowledgement of debts owed will provide the Trustee/Executor with a clearer picture of the total value of your estate.

·         Business Entity Information.  If you have a corporation, limited liability company or limited partnership, have the entity file and records nearby so that the Trustee/Executor can handle this business as part of your estate.  If you have a trust, verify that your personal ownership of the entity is in the name of your trust.

·         Tax Returns.  Tax returns are very helpful for the Trustee/Executor to locate assets.  Interest-bearing and dividend-paying accounts will be disclosed on the tax schedules and the tax return is very helpful for the person or firm preparing the final tax return.

·         Life Insurance Policies/Annuities.  Keep the life insurance contract and the contact information for your life insurance representative nearby for your Trustee/Executor to find.

·         Retirement Accounts (IRA, 401K, etc.).  A copy of last year’s year-end statement is helpful so that your Executor/Trustee can assist the listed beneficiaries complete the process of inheriting the qualified retirement account.

·         Bank Accounts/Credit Cards.  A list of each bank account and credit card and typical or approximate balances can be very helpful, especially online-only accounts.  Fewer banks are sending paper statements these days and locating an account that is only accessed online with an ID and password can be difficult without access to the deceased party’s e-mail account.

·         List of All User Names and Passwords.  Last but not least.  This area of the law is quickly developing.  Regardless of the developing nature of this law and whether or not it’s strictly legal for another person to have access to online accounts, I think that it’s a good idea to provide a list of each online account and the password.  That includes any of the following and probably more than I even list below:
o   E-mail accounts
o   Social Media
o   Media (Music, Movies, TV, e-Books, Photo bank, etc.)
o   Bank Accounts (already stated above)
o   Credit Cards
o   Utilities (Water, Power, Gas, TV, Internet, Sewer, HOA, etc.)
o   Computer Passwords
o   WiFi passwords
o   Phone and Tablet passwords and PINs

Taking care of these details can really help streamline the administration of your estate. Call us today at 702.433.4455.

Wednesday, February 17, 2016

Individual Successor Trustee-Conflict Of Interest

Many people who establish Trusts prefer to nominate an individual, often a child or other family member, as a Successor Trustee of their Trust in the event of their death.  In this situation, the Successor Trustee is often also a beneficiary of the Trust.  A conflict of interest exists in that the individual is, on one hand, a Trustee with a number of duties and responsibilities to the Trust and its beneficiaries, and on the other hand the individual is a beneficiary of the Trust with his or her own self-interests. Normally a Court does not allow conflict of interest situations.  However, Courts recognize the fact that a person creating a Trust often wants a child or family member to serve as Successor Trustee and that the person is also one of the primary beneficiaries of the Trust.  The Court allows this type of conflict of interest, but imposes a number of duties and responsibilities on the Successor Trustee.  Some of these duties are:

       Loyalty – Trustee must administer the Trust in the interest of the Trust beneficiaries, deal fairly and impartially in Trust matters, have no self-dealing and no other conflicts of interests, and must communicate any material facts to the Trust beneficiaries.
       Impartiality – Trustee must administer a Trust so as to afford each beneficiary with the same level of benefits and protection.
       Administer Trust – Trustee must administer the Trust per the terms of the Trust agreement diligently and in good faith, must manage and preserve and make productive the Trust assets, and must account for the Trust assets to the beneficiaries.
       Identify & Segregate Trust Property – Trustee must not commingle Trust assets with non-Trust assets, and must keep Trust property separate and distinct from other property.

In summary, the Successor Trustee must always put the interests of the Trust and its beneficiaries ahead of his or her own self-interests, and must not take personal advantage of his or her position as Successor Trustee.  For example, a Successor Trustee could not sell a Trust asset such as a vehicle at a below market value to his or her own spouse or child. If the Court finds that a Successor Trustee has violated one of his or her duties and damaged the Trust or its beneficiaries, the Court will hold the Successor Trustee personally liable for such damages.       

At the law offices of Jeffrey Burr, we have many years of experience assisting and protecting individual Successor Trustees in the administration of a Trust after the death of a Trustor.  One of our main objectives in doing so is to educate the Successor Trustee as to his or her many duties and responsibilities so that he or she does not unknowingly violate one or more of the duties imposed upon a Successor Trustee.  

Friday, February 12, 2016

Presidential Candidate Hopeful Hilary Clinton Proposes “Big” Changes to the Estate Tax

The Wall Street Journal has reported that U.S. Presidential Hopeful Hillary Clinton proposes changes to the federal estate tax law exemption from its current amount of $5.45 million to $3.5 million.  In addition to decreasing the exemption, Clinton also proposes a rate change of 45% upon estates subject to estate tax.  What some might find to be of most interest is that Clinton’s team reports that this would result in doubling the amount of estates affected by the estate tax from 0.2% to just 0.4%.  You can read more of the details here.

Wednesday, February 3, 2016

Proper Execution of a Last Will and Testament

This past year our probate department reviewed numerous Wills that were not executed or signed properly.  In some cases, through affidavits from the subscribing witnesses, we were able to correct some of these errors and admit the Wills to probate.  Unfortunately, in other cases, the problems were not able to be fixed. Most of these errors were from Wills that were not prepared by an attorney.  Once a person is deceased, errors in the execution of a Will cannot always be corrected.  This can result in complete devastation, with assets being distributed to persons that were not intended by the decedent. 

The Nevada requirements for the execution of a Will are set forth in the Nevada Revised Statutes Chapter 133. These requirements must be followed with exactness.  One missing word can be the difference between a valid Will and an invalid Will.  The requirements are not difficult; however, to someone who is not an attorney, the requirements are easy to miss.  We have found that there are many incorrect Will forms floating around on the internet and are not worth the paper they are written on.

If you have questions regarding the validly of your Will, contact an attorney and they will be able to quickly tell you whether your Will is properly executed.